Ruble: Not a reaction to sanctions, and the consequences of synchronized attacks on currency GEM
Last week a major American investment banks have expressed concerns regarding the formation of technical signs of a deep correction in US stocks.
Yesterday my thoughts on this occasion sounded a transnational investment Bank Morgan Stanley, pointing to the formation of a technical figure of the two “broken leg” in the chart of the S&P 500 index. As a result, was given a “go-ahead” to start the next stage of “coercion to love” to the American assets. Most emerging market currencies (except those that are tied to the U.S. dollar) showed this morning, the synchronous correction.
The depth of the correction (1,67%) and time out on the gentle path – 11:15 GMT match details to a) chart of the Russian ruble to the dollar; b) chart of Polish zloty to the dollar; C) chart of Hungarian Forint to the dollar. Disgraced Turkish Lira has suffered the most, making the peak fall to the dollar since the open of 2.42%. Thus, we are not dealing with the reaction of the ruble to a new package of American sanctions, and with simultaneous coordinated attack against emerging market currencies.
It is clear that everyone is waiting for the devaluation of the ruble on the basis of the fundamental factors of its weakness. However, what is happening really doesn’t look like a planned dull the weakening of the “wooden”, but as a speculative attack. Interesting background event number.
Yesterday morning around 11:00-12:00 at the same time the information appeared in the Russian media about the us senators ultimatum to Putin: new sanctions can be postponed if Russia promises more firmly to implement the Convention on the non-proliferation of chemical weapons (meant “business Skrypalia” and Syria). Asked impossible: to inspect plants, which theoretically could produce chemical weapons.
But at 19:00 GMT, ie after only 7 hours, it was announced that the United States still impose sanctions against Russia because of the “business Skrypalia” that essentially extraterritorially and without logic in the context of timing. In short, the argument can not think. Correctly news sounds as “Imposed sanctions. Point.”
Finally, around the same time reported that Senator Rand Paul has brought to Moscow a letter from Donald trump. Apparently (although yet unprovable) that the absurdity stems from the fact that there was a leak of information in the context of that letter trump, Vladimir Putin is in the Kremlin. It is likely, was a complete surprise to those opponents of trump, which in whatever was wanted to disrupt preparation for their second meeting.
What are the forecasts regarding the recovery of the ruble? Overall, quite favorable, although recovery, as it usually is, it can take weeks, and now it is important that the government does not “tighten the screws” in terms of tax creativity and other measures that reduce the attractiveness of ruble investments. The Bank of Russia, most likely, from now on will be forced to return to the “tough” rhetoric of expectations of a reversal to the policy of increase (not decrease!) the key interest rate.
Most negative in this story is the increase in inflation expectations, which automatically requires banks compensate the risks of ruble deposits in the form of higher interest rates on deposits in rubles. If after the April devaluation of the round, the growth of consumer prices in annual terms was increased from 4.2% to 6.5%, now there are concerns about the growth of this parameter up to 10%, which is a lot.
“International financial center”